Stanbic IBTC Holdings Plc FY 2012 results

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Stanbic IBTC Holdings Plc FY 2012 results

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Stanbic IBTC Holdings Plc FY 2012 results

  1. 1. Stanbic IBTC Holdings PLC Analysis of full-year financial results for the year ended 31 December 2012
  2. 2. 1 Stanbic IBTC Bank Analysis of financial results for the year ended 31 December 2012 Contents Segmental structure for key business units 31 Summarised segmental income statement 33 Personal and Business Banking 34 Overview of group income 51 Net interest income and margin analysis 53 Non-interest revenue 55 Overview of group consolidated assets 64 Loans and advances 66 Loans and advances performance 69 Market capitalisation and price-to-book ratio 84 Return on ordinary equity 81 Financial and other definitions 87 Standard IBTC Bank Section title > Page content Group results in brief Segmental reporting Income statement analysis Balance sheet analysis Market and shareholder information Capital management Other information Corporate and Investment Banking 40 Wealth 46 Credit impairment charges 57 Operating expenses 59 Taxation 62 Deposits and current accounts 74 Funding and liquidity 76 Risk – weighted assets 82 Equity and range analysis 85 Contact details 88 All results in this booklet are presented on an IFRS (International Financial Reporting Standards) basis. Reconciliation of non-GAAP financial information to the most directly comparable measures under IFRS are provided in the “Reconciliation of comprehensive income” and “Reconciliation of equity” sections. Performance highlights 3 Financial results, ratios and statistics 4 Economic and capital market statistics 7 Overview of financial results 8 Summarised income statement 12 Statement of financial position 15 Statement of changes in equity 18 Statement of cash flows 22 Reconciliation of comprehensive income 24 Reconciliation of equity 26 Group entity’s financial statements 28
  3. 3. 32 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Total income CAGR1 (2010-2012): 16% 1 Compounded annual growth rate Total deposits and current accounts Total deposits (CAGR 2010-2012): 38% Total operating income 2010 2011 2012 0 60.0 50.0 10.0 40.0 20.0 30.0 70.0 Nbillion 50.0 55.2 67.4 0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 Nbillion 2010 2011 2012 186.1 287.2 355.4 Performance highlights Performance highlights 3 Financial results, ratios and statistics 4 Economic and capital market statistics 7 Overview of financial results 8 Summarised income statement 12 Statement of financial position 15 Group results in brief Statement of changes in equity 18 Statement of cash flows 22 Reconciliation of comprehensive income 24 Reconciliation of equity 26 Group abridged financial statement 28 Gross income N91,860 million 45% up Deposit liabilities N355,419 million 24% up NPL/total loan ratio 5.1% (2011: 6.2%) Total income N67,410 million 22% up Cost-to-income ratio 72.4% (2011: 75.6%) Liquidity ratio 45.5% Statutory minimum 30% Price-to-book 1.3 times Profit before tax N11,726 million 16% up After tax return on average equity 10.9% (2011: 6.8%) Fitch rating AAA(nga) (2011: AAA(nga)) Profit after tax N10,157 million 53% up Total assets N676,819 million 22% up Credit loss ratio 2.5% (2011: 1.3%) Capital adequacy ratio 22.3% (2011: 20.8%) (2011: 1.9 times) Gross loans and advances N279,473 million 5% up
  4. 4. 54 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Change % 2012 2011 Business unit contribution to profit before tax Profit before tax Nmillion 16 11,726 10,106 Banking business Nmillion (4) 4,255 4,426 Personal and Business Banking Nmillion 47 (5,232) (9,821) Corporate and Investment Banking Nmillion (33) 9,487 14,247 Wealth Nmillion 32 7,471 5,680 Balance sheet Total assets Nmillion 22 676,819 554,507 Loans and advances (net of credit impairments) Nmillion 4 266,344 256,720 Deposit liabilities Nmillion 24 355,419 287,242 Selected returns and ratios Net interest margin % 4.96 4.98 Non-interest revenue to total income % 50.2 50.0 Credit impairment charges Nmillion >100 6,895 3,349 Credit loss ratio % 2.5 1.3 Cost-to-income ratio % 72.4 75.6 Return on average equity (pre-tax) % 14.4 12.2 Return on average equity (after-tax) % 10.9 6.8 Return on average assets (pre-tax) % 1.9 2.1 Return on average assets (after-tax) % 1.6 1.4 Basic and diluted earnings per share kobo 68 50.3 30.0 Net asset value per share kobo 96 856.5 436.1 Shareholders' equity Nmillion 4 83,341 79,867 Other indicators Price to book (P/B ratio) times (32) 1.3 1.9 Total capital adequacy % 22.3 20.8 Tier 1 capital adequacy % 20.7 19.4 Loan to deposit ratio % 78.6 92.6 Non-performing loans to total loans % 5.1 6.2 Effective taxation rate % 13.4 34.3 Number of average employees Number (3) 2,184 2,246 Change % 2012 2011 Balance sheet Total assets Nmillion 20 650,470 540,922 Loans and advances (net of credit impairments) Nmillion 4 266,344 256,720 Selected returns and ratios Return on average equity % 7.9 4.4 Return on average assets % 0.2 0.2 Loan to deposit ratio % 77.7 91.5 Net interest margin % 4.86 4.94 Non-interest revenue to total income % 40.1 41.2 Credit impairment charges Nmillion >100 6,895 3,349 Credit loss ratio % 2.5 1.3 Cost-to-income ratio % 79.4 82.0 Effective taxation rate % (34.1) 33.1 Number of average employees Number (7) 1,823 1,962 Financial results, ratios and statistics Stanbic IBTC Group Banking activities
  5. 5. 76 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Economic and capital market statistics Change % 2012 2011 Economic indicators GDP average growth rate % 6.6 7.3 Headline inflation (12 month average) % 12.2 10.9 Average official exchange rate N/$ 1 155.4 153.7 External reserves $billion 35 44.2 32.6 Market indicators NSE All Share Index 35 28,078.8 20,730.6 NSE equities turnover Nbillion 4 658.2 634.9 Average daily activity million (1) 359.5 364.2 Aggregate market capitalisation Ntrillion 44 14.8 10.3 Equity market capitalisation Ntrillion 37 8.98 6.5 Stanbic share statistics Post HoldCo adjusted share price High for the year kobo (40) 1,238 2,059 Low for the year kobo (6) 1,041 1,106 Closing kobo (26) 1,100 1,481 Shares traded Number of shares thousands (16) 633,567 750,000 Value of shares Nmillion (37) 4,431.6 7,080.0 Market capitalisation Nbillion (29) 110.0 155.6 03/01/201203/02/201203/03/201203/04/201203/05/201203/06/201203/07/201203/08/201203/09/201203/10/201203/11/201203/12/2012 % 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 Share price performance: January – December 2011 (rebased) Stanbic was outperformed by both the NSE All share Index and the Banking Index (BI) in 2012. Stanbic’s adjusted share price depreciated by 25.7%, while the NSE ASI and the BI appreciated by 35.4% and 23.8% respectively during the year. The group during the year adopted the Holding Company structure in line with regulatory requirement. On November 23, 2012, Stanbic IBTC Bank’s shares were delisted from The Nigerian Stock Exchange and Stanbic IBTC Holdings PLC’s shares were listed simultaneously and share price adjusted accordingly. Stanbic IBTC Bank’s shares were delisted on November 23, 2012, while Stanbic IBTC Holdings’ shares were listed on the same day. NSE all share indexBanking index Stanbic share price In 2012, the group experienced: Globally Continued slow economic growth due to the European debt crisis, despite refinancing plans from the European Central Bank. Moderate growth in key emerging markets, specifically China and India, albeit a slower pace than in the previous year. Downgrade of banks’ credit ratings. Contained inflation in spite of rising energy prices. African markets continuing to deliver strong performances in foreign exchange, local bonds and equities. Nigeria Continued monetary policy tightening by the central bank, with monetary policy rate (MPR) maintained at 12%. Rising inflation on the back of increased oil and food prices. Improved yield on government securities. Economic reforms in the power sector and petroleum industry. Persistent high level of unemployment. Bearish trend in the capital markets in the first half of the year, which was reversed in the second half of the year. The NSE ASI appreciated by 35.5% in the year. Security concerns in the Northern part of the country, bunkering and illegal refining of crude oil in Southern part of the country. Ongoing reform of the banking industry.
  6. 6. 98 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Global operating environment The global economic growth remained largely uneven and subdued in most economies in 2012. Global macroeconomic conditions remained weak, especially in the major advanced economies. Global output was weaker than forecast due to the continued contraction in the EuroZone and Japan and less than anticipated growth in Brazil and India. The frailty in the global economy was further compounded by the uncertainties surrounding the resolution of the “fiscal cliff” and the debt ceiling challenges in the US and the difficulties associated with China’s attempt to “rebalance” its growth.These developments adversely affected private sector confidence, worsened the unemployment situation and further tightened financing conditions in both the periphery and core economies. Emerging market economies continued to show superior growth rates, with the IMF estimating GDP growth of 5.3% in 2012, compared to 1.3% in advanced economies. The slowdown in global trade has, however, contained the growth in emerging economies. African economic growth rebounded in 2012 after popular uprisings and political unrest in North Africa brought overall growth down to 3.4% in 2011. Although the continent is still recovering from the global financial crisis of 2008, strong growth is likely despite the difficult external environment and renewed global uncertainty. Africa’s high population growth and rapid rate of urbanisation, as well as its resource wealth and deepening financial sector, are some of the main pillars providing structural support for this counter-cyclical growth pattern. Economic conditions in the sub-Saharan Africa remained generally robust despite the sluggish growth in the global economy. Prudent policies and improved fundamentals in most countries provided impetus for increased economic activity in the region. Domestic operating environment The implementation of the Nigerian government’s policy on fuel subsidy in January 2012 with the resultant labour unrest, stalled economic activities at the beginning of the year, the impact of which was felt by all the sectors of the economy. The Nigerian economy, however, witnessed a robust growth of 6.6% in 2012, albeit lower than the 7.3% achieved in 2011. The slowdown in the GDP growth is attributable to the reduction in non-oil sector activities, especially agriculture and its wholesale and retail trade. Agricultural output was affected by the insecurity in northern parts of the country and the impact of flood on farmlands along the major agricultural belt of the country. The non-oil sector, however, continued to remain the major driver of growth, recording 8.2% increase in contrast to the oil sector, which declined by 0.17% in 2012. Headline inflation averaged 12.2% in 2012 as against 10.9% recorded in 2011.The average core and food inflation stood at 13.9% and 11.3% respectively. The major drivers of headline inflation included food and non-alcoholic beverages, housing, water, electricity and transport. In 2012, the nation’s external reserves witnessed sustained accretion. The reserves stood at US$44.2 billion at the end of 2012, representing a 35% growth over US$32.6 billion recorded in the same period in 2011. The growth is driven by increased revenue from export of crude oil as a result higher oil prices and partial removal of fuel subsidies as well as increased crude oil related taxes and inflow of foreign portfolio investments. Oil revenue increased at an average of 2.7% monthly throughout 2012. The country’s foreign reserves level could finance about 9 months of imports. The foreign exchange rate market remained stable in 2012 on the back of improved supply of foreign exchanged by the oil companies and enhanced capital inflows from portfolio investors. The official exchange rate averaged N155.4/US$, in 2012 as against N153.7/US$ recorded in 2011. However, at the Wholesale Dutch Auction system, the exchange rate opened at N158.4/US$ at the beginning of the year and closed at N157.3/US$ at the end of the year, thus appreciating by 0.7%. The banking sector continued to operate under a testing condition in 2012 as a result of the high interest rate environment. In a bid to contain inflation, ensure foreign exchange and price stability, the central bank maintained the Monetary Policy Rate and liquidity ratio at 12% and 30% respectively and increased the cash reserve requirement from 8% to 12% during the year. The steady growth across most sectors and the inclusion of selected Nigerian government bonds in the JP Morgan Government Bond Index-Emerging Markets resulted in international interest in the Nigerian bond market, and the reawakening of local institutional investors’ appetite for equities. The Nigerian capital market witnessed its strongest performance since 2008. The NSE All-Share index closed the year at 28,078.80, thus representing a 35.5%, growth when compared to 20,730.63 recorded at the beginning of the year. Equity market capitalization also increased by 37.4% from N6.53 trillion at the beginning of the year to N8.98 trillion at the end of 2012. The positive performance of the capital market is attributable to the sustained increase in the demand for blue-chip stocks, particularly in the banking and consumers goods sectors following improvements in earnings and growing investor confidence. Operating environment The country’s long term foreign and local currency sovereign credit rating was upgraded by Standard and Poor’s in 2012 to BB- with a stable outlook, three notches below investment grade, from B+ it received in 2011. The long-term national scale rating was also upgraded to ‘ngAA-’ from ‘ngA+. ’The upgrade was on the back of tighter fiscal policy of the government resulting in higher foreign exchange reserves and government reform efforts on fuel subsidies and in the electricity and banking sectors. Also, Moody’s ratings expanded its rating coverage to include Nigeria during the year. The country was assigned local- and foreign- currency issuer ratings of Ba3 with a stable outlook on the back of the country’s strong economic resilience and strength. During the year, Fitch ratings affirmed Nigeria’s Long-term foreign and local currency Issuer Default Ratings (IDR) at ‘BB-’ and ‘BB’ respectively with a stable outlook. Our results The trading environment in 2012 was characterised by sustained monetary policy tightening in the money market, improved performance of the capital market in the second half of the year, improved yields on government securities and continued competition for good quality corporate credits. Notwithstanding the difficult environment, the group’s financial performance has been sound and demonstrates good momentum in our businesses. Although earnings potential continued to be constrained in the face of continued monetary policy tightening with the resultant pressure on margins, our diversified business model, highly disciplined approach to risk management, excellent customer service and skilled and passionate people made 2012 a pleasing year. The group delivered a 45% growth in gross income to a record N91.9 billion, and a 22% growth in total income to N67.4 billion. Profit before and after tax grew by 16% and 53% to N11.7 billion and N10.2 billion respectively. Total assets stood at N676.8 billion, thus representing a 22% growth. Gross loans and advances grew by 5% to N279.5 billion, while the deposit liabilities increased by 24% to N355.4 billion. The key performance ratios are shown in the table below: Highlights in 2012 2012 % 2011 % Net interest margin 4.96 4.98 Return on average equity (after-tax) 10.9 6.8 Return on average assets (after-tax) 1.6 1.4 Cost-to-income ratio 72.4 75.6 Non-performing loans to total loans 5.1 6.2 Capital adequacy 22.3 20.8 Earnings per share (weighted) 50k 30k The group’s 2012 financial results reflect increased transactional volumes and activities, strong deposits growth, improvement in asset quality, diversified revenue stream, albeit an increase in cost of funding and growth in impairment charges. A major focus area for 2012 was on driving transactional banking revenues. In the Corporate and Investment Banking (CIB) business unit, Transactional products and services (TPS) revenue grew by 66% chiefly on the back of increased revenue from custody business. In Personal and Business Banking (PBB) business unit, total revenue grew by 48% as a result of increased volume of transactions and activities as we continue to leverage on our expanded delivery network. Income growth far exceeded cost growth for the first time in 3 years as we continued to leverage our expanded delivery network. Income growth in 2012 was 22%, while cost growth was 17% resulting in a lower cost-to-income ratio compared to what was recorded in 2011. Wealth business unit results were particularly strong with total income up 40%. The business unit maintained its market leadership as the number one wealth manager in Nigeria. Our mobile money product celebrated its first anniversary during the year. Stanbic is currently the market leader with over 700,000 clients on its mobile money platform and is one of the few operators whose solution works with all mobile telecommunication companies.The group is focused on ensuring a successful implementation of its mobile money strategy. In line with the ongoing reform by the Central Bank, aimed at promoting a sound financial system, Stanbic IBTC complied in 2012 with the regulatory directive on the separation of banking business from non-banking activities. The Group adopted the Holding Company structure in the latter part of 2012. The new corporate structure became effective on 23 November 2012 with the delisting of Stanbic IBTC Bank’s shares and listing of Stanbic IBTC Holdings PLC’s shares on The Nigerian Stock Exchange. The new corporate structure will contribute to improved shareholder value by ensuring that shareholders benefit from the entire business and retain the same exposure to the financial services that they had previously, whilst ensuring that the group continues to provide end-to-end financial solutions to its clients, by retaining all its existing lines of business, in line with its vision. Overview of financial results
  7. 7. 1110 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Non-interest revenue Non-interest revenue increased by 23%, with net fee and commission revenue up 39%, trading revenue down 9% and other revenue down by 47%. Growth in net fee and commission revenue was achieved on the back of increased transaction volumes, a steady growth within our wealth business, closure of good advisory mandates and a gradual improvement in the capital market activities and prices in the second half of 2012, which positively affected the revenues of our custody, stock broking and asset management businesses. Documentation and administration fees grew by over 100%, while account transaction fees was up 28%. Trading revenue, which is largely income from money market and fixed income trading, also benefitted from increased transaction volumes. Interest rate trading grew by over 100% on the back of increased client base and activity levels. Foreign exchange and credit trading however, declined by 1% and 55% respectively.The marginal decrease in foreign exchange trading revenue is attributable to the relative stability in the foreign exchange market in 2012 as against volatility witnessed in the second quarter of 2011. Other revenue included dividend income and other non-bank revenue. Overall, trading revenue declined by 9% to N8.1 billion in 2012. Credit impairments Credit impairment charges of N6.9 billion were significantly higher than the N3.3 billion in the prior year, while average gross loans and advances increased by 22%. Consequently, credit loss ratio increased to 2.5% from 1.3% in the prior year. The increase in impairment charges was largely due to higher specific impairment provisioning within CIB, as 3 new corporate loans were provisioned during the year. The group also conservatively provided for loans in PBB due to the high interest rate environment, which may adversely impact repayment. During the year, a review of specific and portfolio impairment methodologies in mortgage loans was undertaken. A consequence of this was that more risk is now categorized under specific impairments rather than under portfolio impairments. Credit impairment charges benefitted from recoveries amounting to N425 million during the year. Operating expenses Operating expenses grew by 17% to N48.8 billion on the back of growth in staff costs and other operating expenses. Staff costs grew by 12% during the year. Fixed remuneration was up 11% due to higher non-full time employees and annual salary increases.Average headcount of full time employees decreased by 3%, while that of non-full time employees increased by 109%. Other operating expenses grew by 20% largely due to higher information technology cost for securing competitive Challenges in 2012 The key challenges encountered in 2012 were: Cost of funding: Expensive term funding accounted for more than 50% of the group’s deposit book in 2012. This adversely impacted the net interest income and profitability. The group is focused on gathering lower priced retail deposits (savings and current accounts) by leveraging on the expanded delivery network, providing excellent service and structuring of products that meet customers’ needs. High credit impairment charges: The group conservatively provided for its loan book in the light of the prevailing high interest rate environment. Income statement analysis Our banking activities achieved pleasing revenue growth of 16%, which is testament to our solid client franchises. Credit impairments was up by over 100%, somewhat higher than anticipated due to our conservative stance on impairments on loans due to the high interest rate environment. The group’s profitability was hampered by margin compression, a function of the high interest rate environment, with limited ability to increase lending rates particularly in the corporate customer segment, and high cost of funding. Profitability was also adversely impacted by the growth in credit impairment charges. Net interest income The group’s interest income increased significantly by 63% to N57.8 billion supported by continued growth in lending activities, occasioned by growing customer relationships and positive yields in investment securities. However, growth in interest income was tempered by marginal growth in the loan book. Gross loans and advances grew by 5% as a result of the sell down of existing large exposures to comply with a reduced single obligor limit post the HoldCo restructuring and sale of eligible assets to the Asset Management Corporation of Nigeria (AMCON). Notwithstanding the sale, revenue from loans and advances represented 76% of total interest income. The growth in interest income was enough to douse the effect of the significant growth in interest expense. Interest expense grew by 212% to N24.3 billion in 2012. The huge growth in interest expense is due to increasing cost of funding driven by the sustained monetary policy tightening and the skewing of the deposit book towards expensive wholesale funding. Overall, net interest income increased by 21% to N33.6 billion, while net interest margin (net interest income to total asset), which measures the quality of spread, stood at 4.96%, marginally below the 4.98% recorded in 2011. advantage in business efficiency, AMCON sinking fund contribution and premises and marketing cost. Compounded with increased cost of funding, the cost-to-income ratio stood at 72.4% in 2012, compared to 75.6% recorded in 2011. This ratio witnessed a gradual decline quarter-on-quarter. The cost-to-income ratio of 66.5%, 72.2%, 77.6% and 74.6% was recorded in 4Q 2012, 3Q 2012, 2Q 2012 and 1Q 2012 respectively. Overall, the group recorded a 16% growth in profit before tax to N11.7 billion, while profit after tax increased by 53% to N10.2 billion, benefitting from lower taxation. A significant portion of the group’s earnings in 2012 was derived from tax exemption sources, particularly the Federal government bonds and treasury bills, which resulted in tax savings. Consequently, the effective tax rate in 2012 improved to 13% from 34% in 2011. Balance sheet analysis Total assets stood at N676.8 billion at the end of 2012. This represents a 22% growth over the N554.5 billion recorded at the end of 2011. The growth is driven by loans and advances and liquid assets. The group’s total assets were funded principally from deposits from customers, which accounted for 53% of total assets. Gross loans and advances Loans to customers grew 5% year-on-year and resulted from 13% growth in PBB loans to customers, and 1% increase in that of CIB. The marginal increase in CIB loan book is connected to the sale of large two eligible risk assets to AMCON in the last quarter of the year coupled with the sell down of existing large performing exposures to comply with a reduced single obligor limit post the HoldCo restructuring. The growth in the PBB loan portfolio is driven by our growing customer relationships enhanced by our enlarged delivery footprint. Asset quality continues to witness improvement as the ratio of non-performing loans to total loans stood at 5.1% in 2012 as against 6.2% achieved in 2011. Non-performing loans (NPL) reduced by 13% on the back of the two CIB eligible assets sold to AMCON. Consequently, non-performing loans of CIB were down by 58%, while NPL/Total loan ratio was down to 3.3% from 8.6% in 2011. PBB’s ratio of non-performing loans to total loans grew significantly to 8.2% in 2012 from 3.2% in 2011, as a result of strain on retail customers attributable to the high interest rate environment. The NPL coverage ratio was 92% in 2012 as against 57% recorded in the prior year. Funding and liquidity The group’s overall liquidity position remains strong with liquidity buffers held for potential stressed conditions amounting to N173.5 billion. These levels of liquidity are prudent given the group’s liquidity stress-testing philosophy. Liquidity ratio was 45.5% in 2012, which is above the 30% regulatory requirement. Total deposits from customers grew by 24% on the back of 48% growth in PBB deposit book and 9% growth in that of CIB. The group’s most stable funding source, demand and savings deposits from PBB customers, was 28% higher than the prior year. The growth in deposit base is driven by our enlarged delivery network, service excellence and ability to structure products that meet customers’ needs. The ratio of low cost demand and saving deposits to total deposits was 49% in 2012, slightly below the 51% recorded in 2011.The group is focused on generating low cost deposits to improve the deposit mix. Capital management The group maintained a healthy level of capitalisation above the regulatory requirements in 2012 despite the considerable growth in business operations. Tier I capital adequacy ratio was 20.7% (2011: 19.4%), while the total capital adequacy ratio stood at 22.3% (2011: 20.8%) in 2012. These ratios are significantly higher than the statutory minimum of 10%. The group’s capital is deemed adequate to support business risks and contingencies despite the recent corporate restructuring, and will enable us to continue to pursue growth opportunities within the Nigerian market. 2012 Nmillion 2011 Nmillion Tier I capital 78,172 72,193 Tier II capital 6,152 5,249 Total qualifying capital 84,324 77,442 Risk weighted assets 377,992 371,444 Capital adequacy Tier I 20.7% 19.4% Tier II 1.6% 1.4% Total 22.3% 20.8%
  8. 8. 1312 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Change % 2012 Nmillion 2011 Nmillion Gross income 45 91,860 63,377 Net interest income 21 33,554 27,642 Interest income 63 57,818 35,428 Interest expense 100 (24,264) (7,786) Non-interest revenue 23 33,856 27,605 Net fee and commission revenue 39 25,568 18,388 Fee and commission income 37 25,754 18,732 Fee and commission expense (46) (186) (344) Trading revenue (9) 8,091 8,845 Other revenue (47) 197 372 Total income 22 67,410 55,247 Credit impairment charges 100 (6,895) (3,349) Credit impairment on non-performing credits 100 (6,391) (2,381) Credit impairment on performing credits (48) (504) (968) Income after impairment charges 17 60,515 51,898 Operating expenses 17 (48,789) (41,792) Staff costs 12 (19,953) (17,840) Other operating expenses 20 (28,836) (23,952) Profit before taxation 16 11,726 10,106 Taxation (55) (1,569) (3,463) Profit after taxation 53 10,157 6,643 Profit attributable to: Non-controlling interest 32 1,289 976 Equity holders of the parents 56 8,868 5,667 Profit after taxation and minorities 53 10,157 6,643 Summarised income statement – Group Change % 2012 Nmillion 2011 Nmillion Profit for the year 53 10,157 6,643 Other comprehensive income (100) 3,914 (4,035) Other comprehensive income for the period, net of income tax (100) 3,914 (4,035) Net change in fair value of available-for-sale financial assets (100) 3,645 (3,933) Realised fair value adjustments on available-for-sale financial assets (100) 269 (48) Income tax on other comprehensive income (100) - (54) Total comprehensive income of the year 100 14,071 2,608 Attributable to non-controlling interests 42 1,255 881 Attributable to equity holders of the parent 100 12,816 1,727 Statement of other comprehensive income 4Q 2012 Nmillion 3Q 2012 Nmillion 2Q 2012 Nmillion 1Q 2012 Nmillion Gross income 27,830 22,132 21,470 20,428 Interest income 15,283 14,539 14,075 13,921 Interest expense (8,330) (5,168) (5,103) (5,663) Net interest income 6,953 9,371 8,972 8,258 Non-interest revenue 12,538 7,500 7,387 6,431 Net fee and commission income 8,433 6,033 6,024 5,078 Fee and commission income 8,442 6,126 6,032 5,154 Fee and commission expense (9) (93) (8) (76) Trading revenue 4,046 1,459 1,259 1,327 Other revenue 59 8 104 26 Total income 19,491 16,871 16,359 14,689 Credit impairment charges (3,820) (1,785) (1,011) (279) Income after credit impairment charges 15,671 15,086 15,348 14,410 Operating expenses (12,962) (12,187) (12,687) (10,953) Staff costs (4,776) (4,917) (5,404) (4,856) Other operating expenses (8,186) (7,270) (7,283) (6,097) Net income before indirect taxation 2,709 2,899 2,661 3,457 Indirect taxation (37) (160) (96) (21) Profit before direct taxation 2,672 2,739 2,565 3,436 Direct taxation 488 (735) (73) (935) Profit for the period 3,160 2,004 2,492 2,501 Summarised Group income statement quarterly analysis
  9. 9. 1514 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Change % 2012 Nmillion 2011 Nmillion Gross income 45 77,732 53,505 Net interest income 18 31,603 26,732 Interest income 63 56,421 34,523 Interest expense 100 (24,818) (7,791) Non-interest revenue 13 21,125 18,732 Net fee and commission revenue 31 10,978 8,380 Fee and commission income 29 11,164 8,630 Fee and commission expense (26) (186) (250) Trading revenue (9) 8,013 8,845 Other revenue 42 2,134 1,507 Total income 16 52,728 45,464 Credit impairment charges 100 (6,895) (3,349) Income after impairment charges 9 45,833 42,115 Operating expenses 12 (41,881) (37,286) Staff costs 9 (17,164) (15,809) Other operating expenses 15 (24,717) (21,477) Net income before indirect taxation (18) 3,952 4,829 Indirect taxation (28) (188) (260) Profit before direct taxation (18) 3,764 4,569 Direct taxation (100) 1,536 (1,337) Profit for the period 64 5,300 3,232 Profit attributable to: Non-controlling interests - - Equity holders of the parent 64 5,300 3,232 Profit for the period 64 5,300 3,232 Summarised income statement – Bank Change % 2012 Nmillion 2011 Nmillion Profit for the year 64 5,300 3,232 Other comprehensive income (100) 3,472 (3,563) Other comprehensive income for the period, net of income tax (100) 3,472 (3,563) Net change in fair value of available-for-sale financial assets (100) 3,203 (3,481) Realised fair value adjustments on available-for-sale financial assets (100) 269 (48) Income tax on other comprehensive income (100) - (34) Total comprehensive income of the period (100) 8,772 (331) Attributable to non-controlling interests - - Attributable to equity holders of the parent (100) 8,772 (331) Statement of other comprehensive income Change % 2012 Nmillion 2011 Nmillion 2010 Nmillion Assets Cash and balances with central banks 100 76,933 30,074 10,048 Trading assets 73 114,877 66,476 70,886 Pledged assets 25 24,440 19,501 18,573 Derivative assets (45) 1,709 3,081 263 Financial Investments (4) 85,757 88,877 29,203 Loans and advances 6 320,662 302,771 209,970 Loans and advances to banks 18 54,318 46,051 33,291 Loans and advances to customers 4 266,344 256,720 176,679 Current and deferred tax assets 95 5,212 2,668 1,696 Other assets 100 22,771 11,299 16,375 Intangible assets (100) - 5,036 4,559 Property and equipment (1) 24,458 24,724 25,645 Total assets 22 676,819 554,507 387,218 Equity and liabilities Liabilities Trading liabilities 40 88,371 63,173 50,116 Derivative liabilities 3 772 749 - Deposit and current accounts 27 382,051 299,787 192,350 Deposit and current accounts from banks 100 26,632 12,545 6,232 Deposit and current accounts from customers 24 355,419 287,242 186,118 Other borrowings 40 66,873 47,618 18,272 Current and deferred tax liabilities (7) 4,844 5,187 4,703 Other liabilities (14) 48,257 56,215 34,799 Total liabilities 25 591,168 472,729 300,240 Capital and reserves Share capital (47) 5,000 9,375 9,375 Share premium reserve 0 65,450 65,450 65,450 Other reserves 100 12,891 5,042 10,777 Shareholders funds 4 83,341 79,867 85,602 Non-controlling interest 21 2,310 1,911 1,376 Total equity and liabilities 22 676,819 554,507 387,218 Statement of financial position – Group
  10. 10. 1716 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Statement of financial position quarterly analysis – Group 4Q 2012 Nmillion 3Q 2012 Nmillion 2Q 2012 Nmillion 1Q 2012 Nmillion Assets Cash and balances with central banks 76,933 44,790 36,391 41,895 Derivative assets 1,709 1,461 2,674 2,952 Trading assets 114,877 157,091 75,974 158,282 Pledged assets 24,440 24,118 25,228 20,930 Financial investments 85,757 64,963 71,159 74,872 Loans and advances 320,662 291,939 320,956 302,559 Loans and advances to banks 54,318 30,872 48,498 35,958 Loans and advances to customers 266,344 261,067 272,458 266,601 Other assets 22,771 18,909 14,749 35,466 Current and deferred tax assets 5,212 2,905 2,881 2,663 Tangible assets - 3,791 3,827 3,879 Property and equipment 24,458 24,217 23,603 23,946 Total assets 676,819 634,184 577,442 667,444 Equity and liabilities Liabilities Trading liabilities 88,371 104,675 106,478 164,336 Derivative liabilities 772 220 295 624 Deposit and current accounts 382,051 341,785 262,672 293,806 Deposits and current accounts from banks 26,632 25,950 16,473 23,221 Deposits and current accounts from customers 355,419 315,835 246,199 270,585 Other borrowings 66,873 55,229 53,960 40,584 Current and deffered tax liabilities 4,844 2,999 3,775 6,034 Other liabilities 48,257 39,846 63,580 76,850 Total liabilities 591,168 544,754 490,760 582,234 Equity Share capital 5,000 9,375 9,375 9,375 Share premium reserve 65,450 47,469 47,469 47,469 Other reserves 12,891 30,608 28,288 26,210 Shareholders’ funds 83,341 87,452 85,132 83,054 Non-controlling interest 2,310 1,978 1,550 2,156 Liabilities and equity 676,819 634,184 577,442 667,444 Change % 31 Dec 2012 Nmillion 31 Dec 2011 Nmillion 1 Jan 2011 Nmillion Assets Cash and balances with central banks 100 76,840 30,072 10,048 Derivative assets (45) 1,709 3,081 263 Trading assets 71 113,401 66,476 70,886 Pledged assets 25 24,440 19,501 18,573 Financial investments (9) 71,629 79,117 20,990 Loans and advances 4 313,915 301,285 208,153 Loans and advances to banks 7 47,571 44,565 31,474 Loans and advances to customers 4 266,344 256,720 176,679 Deferred tax assets 91 5,169 2,700 1,689 Other assets 100 19,378 9,385 17,475 Intangible assets (100) - 5,033 4,477 Property and equipment (1) 23,989 24,272 25,336 Total assets 20 650,470 540,922 377,890 Equity and liabilities Equity (8) 64,188 69,724 77,428 Equity attributable to ordinary shareholders (8) 64,188 69,724 77,428 Ordinary share capital (80) 1,875 9,375 9,375 Ordinary share premium (11) 42,469 47,469 47,469 Reserves 54 19,844 12,880 20,584 Liabilities 24 586,282 471,198 300,462 Derivative liabilities 3 772 749 - Trading liabilities 40 88,371 63,173 50,116 Deposit and current accounts 27 386,135 303,365 194,968 Deposits from banks 100 26,632 12,545 7,002 Deposits from customers 24 359,503 290,820 187,966 Other borrowings 40 66,873 47,618 18,272 Current tax liabilities (41) 1,577 2,670 716 Deferred tax liabilities 0 - - - Other liabilities (21) 42,554 53,623 36,390 Total equity and liabilities 20 650,470 540,922 377,890 Statement of financial position – Bank
  11. 11. 1918 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Ordinary share capital Nmillion Share premium Nmillion Merger reserve Nmillion Statutory credit risk reserve Nmillion Available-for- sale revaluation reserve Nmillion Share-based payment reserve Nmillion Other regulatory reserves Nmillion Retained earnings Nmillion Ordinary shareholders’ equity Nmillion Non- controlling interest Nmillion Total equity Nmillion Balance at 1 January 2011 9,375 65,450 (19,123) 527 107 166 14,055 15,045 85,602 1,376 86,978 Total comprehensive (loss)/income for the year - - - - (4,089) - 1,022 4,645 1,578 976 2,554 Profit for the year - - - - - - 1,022 4,645 5,667 976 6,643 Other comprehensive (loss)/income after tax for the year - - - - (4,089) - - - (4,089) - (4,089) Net change in fair value on available-for-sale financial assets - - - - (3,987) - - - (3,987) - (3,987) Realised fair value adjustments on available-for-sale financial assets - - - - (48) - - - (48) - (48) Income tax on other comprehensive income - - - - (54) - - - (54) - (54) Equity-settled share-based payment transactions - - - - - 129 - (129) - - - Statutory credit risk reserve - - - (527) - - - 527 - - - Transactions with shareholders, recorded directly in equity - - - - - - - (7,313) (7,313) (441) (7,754) Dividends paid to equity holders - - - - - - - (7,313) (7,313) (441) (7,754) Balance at 31 December 2011 9,375 65,450 (19,123) - (3,982) 295 15,077 12,775 79,867 1,911 81,778 Balance at 1 January 2012 9,375 65,450 (19,123) - (3,982) 295 15,077 12,775 79,867 1,911 81,778 Total comprehensive income/(loss) for the year - - - - 3,914 - 1 343 7,525 12,782 1,255 14,037 Profit for the period - - - - - - 1,343 7,525 8,868 1,289 10,157 Other comprehensive income/(loss) after tax for the year - - - - 3,914 - - - 3,914 (34) 3,880 Net change in fair value on available-for-sale financial assets - - - - 3,645 - - - 3,645 (34) 3,611 Realised fair value adjustments on available-for-sale financial assets - - - - 269 - - - 269 - 269 Others - - - - - - - - - - - Transfer of non-banking subsidiaries - - - - - - - - - - - Transactions with shareholders, recorded directly in equity (4,375) - - - - 67 - (5,000) (9,308) (856) (10,164) Equity-settled share-based payment transactions - - - - - 67 - - 67 - 67 Shares cancelled on holding company restructuring (7,500) - - - - - - - (7,500) - (7,500) Issue of shares on holding company restructuring 3,125 - - - - - - (3,125) - - - Dividends paid to equity holders - - - - - - - (1,875) (1,875) (856) (2,731) Balance at 31 December 2012 5,000 65,450 (19,123) - (68) 362 16,420 15,300 83,341 2,310 85,651 Statement of changes in equity – Group
  12. 12. 2120 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Ordinary share capital Nmillion Share premium Nmillion Statutory credit risk reserve Nmillion Available-for- sale revaluation reserve Nmillion Share-based payment reserve Nmillion SMIEIS reserves Nmillion Statutory reserves Nmillion Retained earnings Nmillion Ordinary shareholders’ equity Nmillion Balance at 1 January 2011 9,375 47,469 527 (38) 166 1,039 12,246 6,644 77,428 Total comprehensive (loss)/income for the year - - - (3,563) - - 607 2,625 (331) Profit for the year - - - - - - 607 2,625 3,232 Other comprehensive (loss)/income after tax for the year - - - (3,563) - - - - (3,563) Net change in fair value on available-for-sale financial assets - - - (3,611) - - - - (3,611) Realised fair value adjustments on available-for-sale financial assets - - - 48 - - - - 48 Statutory credit risk reserve - - (527) - - - - 527 - Transactions with shareholders, recorded directly in equity - - - - 129 - - (7,502) (7,373) Equity-settled share-based payment transactions - - - - 129 - - (129) - Transfer of investment in non-banking subsidiaries - - - - - - - (60) (60) Dividends paid to equity holders - - - - - - - (7,313) (7,313) Balance at 31 December 2011 9,375 47,469 - (3,601) 295 1,039 12,853 2,294 69,724 Balance at 1 January 2012 9,375 47,469 - (3,601) 295 1,039 12,853 2,294 69,724 Total comprehensive income/(loss) for the year - - - 3,472 - - 795 4,505 8,772 Profit for the period - - - - - - 795 4,505 5,300 Other comprehensive income/(loss) after tax for the year - - - 3,472 - - - - 3,472 Net change in fair value on available-for-sale financial assets - - - 3,203 - - - - 3,203 Realised fair value adjustments on available-for-sale financial assets - - - 269 - - - - 269 Others - - - - - - - - - Statutory credit risk reserve - - - - - - - - - Transactions with shareholders, recorded directly in equity (7,500) (5,000) - - 67 - - (1,875) (14 308) Equity-settled share-based payment transactions - - - - 67 - - - 67 Shares cancelled on holding company restructuring (7,500) - - - - - - - (7,500) Transfer to Holding Company as part of scheme of arrangement. - (5,000) - - - - - - (5,000) Dividends paid to equity holders - - - - - - - (1,875) (1,875) Balance at 31 December 2012 1,875 42,469 - (129) 362 1,039 13,648 4,924 64,188 Statement of changes in equity – Bank
  13. 13. 2322 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Change % 2012 Nmillion 2011 Nmillion Net cash flows from operating activities (56) 28,923 65,750 Cash flows used in operations (100) (244) 41,413 Net income before indirect taxes 16 11,726 10,106 Adjusted for: 12 (23,657) (21,151) Amortisation of intangible assets (100) - 72 Credit impairment charges on loans and advances 100 6,895 3,349 Depreciation of property and equipment (0) 3,410 3,428 Dividends included in trading revenue and investment income (50) (112) (226) Equity-settled share-based payments (53) 67 142 Indirect taxation 100 (314) (130) Interest expense 100 24,264 7,786 Interest income 63 (57,818) (35,428) Loss/(profit) on sale of property and equipment (66) (49) (144) Increase in income-earning assets (1) (88,203) (89,219) Increase in deposits and other liabilities (29) 99,890 141,677 Dividends received (50) 112 226 Interest paid 100 (24,264) (7,786) Interest received 63 57,818 35,428 Direct taxation paid 27 (4,499) (3,531) Net cash flows used in investing activities (100) 8,941 (67,527) Capital expenditure on: Property (87) (89) (667) Equipment, furniture and vehicles (34) (2,091) (3,175) Intangible assets (95) (30) (612) Proceeds from sale of property, equipment, furniture and vehicles (33) 657 980 Proceeds from sale of intangible assets 100 3,494 - Investment in financial investment securities - 7,000 (64,053) Investment in new subsdiary – Stanbic IBTC Capital Limited - - - Net cash flows used in financing activities (58) 9,024 21 682 Net increase/(decrease) in other borrowings (35) 19,255 29,436 Inflow received from Stanbic IBTC Bank PLC - - - Special dividend paid on share cancellation (7,500) - Net dividends paid (65) (2,731) (7,754) Effect of exchange rate changes on cash and cash equivalents (100) (29) 121 Net increase in cash and cash equivalents 100 46,859 20,026 Cash and cash equivalents at beginning of the year 100 30,074 10,048 Cash and cash equivalents at end of the year 100 76,933 30,074 Change % 2012 Nmillion 2011 Nmillion Net cash flows from operating activities (54) 28,824 62,596 Cash flows used in operations (100) (2,780) 36,230 Net income before indirect taxes (18) 3,952 4,829 Adjusted for: 9 (23,760) (21,853) Amortisation of intangible assets (100) - 50 Credit impairment charges on loans and advances 100 6,895 3,349 Depreciation of property and equipment 0 3,231 3,222 Dividends included in trading revenue and investment income 43 (2,114) (1,474) Equity-settled share-based payments (48) 67 129 Indirect taxation (28) (188) (260) Interest expense 100 24,818 7,791 Interest income 63 (56,421) (34,523) Loss/(profit) on sale of property and equipment (65) (48) (137) Increase in income-earning assets (6) (79,987) (85,463) Increase in deposits and other liabilities (30) 97,015 138,717 Dividends received (43) 2,114 1,474 Interest paid 100 (24,818) (7,791) Interest received 63 56,421 34,523 Direct taxation paid 15 (2,113) (1,840) Net cash flows used in investing activities (100) 13,093 (64,816) Capital expenditure on: Property (87) (90) (667) Equipment, furniture and vehicles (37) (1,735) (2,736) Intangible assets (95) (30) (612) Proceeds from sale of property, equipment, furniture and vehicles (48) 494 949 Financial investments (100) 10,960 (61,690) Proceeds from sale of intangible assets 100 3,494 - Increase in investment in existing subsidiary (100) - (60) Net cash flows used in financing activities (78) 4,880 22,123 Net increase/(decrease) in other borrowings (35) 19,255 29,436 Special dividend paid on share cancellation (7,500) - Cash transferred to new holding company (5,000) - Net dividends paid (74) (1,875) (7,313) Effect of exchange rate changes on cash and cash equivalents (100) (29) 121 Net increase in cash and cash equivalents 100 46,768 20,024 Cash and cash equivalents at beginning of the year 100 30,072 10,048 Cash and cash equivalents at end of the year 100 76,840 30,072 Statement of cash flow – Group Statement of cash flow – Bank
  14. 14. 2524 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Previous GAAP Nmillion Effect of transition to IFRSs Nmillion IFRSs Nmillion Income from banking activities Net interest income 29,764 (2,122) 27,642 Interest income 40,343 (4,915) 35,428 Interest expense (10,579) 2,793 (7,786) Non-interest revenue 26,741 864 27,605 Net fee and commission revenue 20,709 (2,321) 18,388 Trading revenue 5,660 3,185 8,845 Other revenue 372 - 372 Total income 56,505 (1,258) 55,247 Credit impairment charges (4,705) 1,356 (3,349) Provision for credit losses (3,571) 222 (3,349) Diminution in other assets value (1,134) 1,134 - Income after credit impairment charges 51,800 98 51,898 Operating expenses (40,557) (1,235) (41,792) Staff costs (16,570) (1,270) (17,840) Other operating expenses (23,987) 35 (23,952) Net income before taxation 11,243 (1,137) 10,106 Taxation (3,803) 340 (3,463) Profit after taxation 7,440 (797) 6,643 Profit for the year 7,440 (797) 6,643 Other comprehensive income Total other comprehensive income of the period - (3,903) (3,903) Net change in fair value of available-for-sale financial assets - (3,801) (3,801) Realised fair value adjustments on available-for-sale financial assets transferred to profit or loss - (48) (48) Income tax on other comprehensive income - (54) (54) Total comprehensive income for the year 7,440 (4,700) 2,740 Previous GAAP Nmillion Effect of transition to IFRSs Nmillion IFRSs Nmillion Income from banking activities Net interest income 28,855 (2,123) 26,732 Interest income 39,458 (4,935) 34,523 Interest expense (10,603) 2,812 (7,791) Non-interest revenue 17,873 859 18,732 Net fee and commission revenue 10,706 (2,326) 8,380 Trading revenue 5,660 3,185 8,845 Other revenue 1,507 - 1,507 Total income 46,728 (1,264) 45,464 Credit impairment charges (4,705) 1,356 (3,349) Provision for credit losses (3,571) 222 (3,349) Diminution in other assets value (1,134) 1,134 - Income after credit impairment charges 42,023 92 42,115 Operating expenses (36,029) (1,257) (37,286) Staff costs (14,613) (1,196) (15,809) Other operating expenses (21,416) (61) (21,477) Net income before taxation 5,994 (1,165) 4,829 Taxation (1,946) 349 (1,597) Profit after taxation 4,048 (816) 3,232 Profit for the year 4,048 (816) 3,232 Other comprehensive income Total other comprehensive income of the period - (3,563) (3,563) Net change in fair value of available-for-sale financial assets - (3,481) (3,481) Realised fair value adjustments on available-for-sale financial assets transferred to profit or loss - (48) (48) Income tax on other comprehensive income - (34) (34) Total comprehensive income for the year 4,048 (4,379) (331) Reconciliation of comprehensive income for the year ended 31 December 2011 – Group Reconciliation of comprehensive income for the year ended 31 December 2011 – Bank
  15. 15. 2726 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis 1 Jan 11 31 Dec 11 Previous GAAP Nmillion Effect of transition to IFRSs Nmillion IFRSs Nmillion Previous GAAP Nmillion Effect of transition to IFRSs Nmillion IFRSs Nmillion Assets Cash and balances with central banks 10,048 - 10,048 30,074 - 30,074 Derivative assets - 263 263 - 3,081 3,081 Trading assets - 70,886 70,886 - 66,476 66,476 Pledged assets - 18,573 18,573 - 19,501 19,501 Financial investments 60,013 (30,810) 29,203 131,195 (42,318) 88,877 Loans and advances 266,113 (56,143) 209,970 332,867 (30,096) 302,771 Loans and advances to banks 88,659 (55,368) 33,291 77,282 (31,231) 46,051 Loans and advances to customers 177,454 (775) 176,679 255,585 1,135 256,720 Current and deferred tax assets 939 757 1,696 1,566 1,102 2,668 Other assets 16,176 199 16,375 27,647 (16,348) 11,299 Intangible assets - 4,559 4,559 5,036 - 5,036 Property and equipment 31,252 (5,607) 25,645 25,839 (1,115) 24,724 Total assets 384,541 2,677 387,218 554,224 283 554,507 Equity and liabilities Equity 85,126 1,852 86,978 84,719 (2,941) 81,778 Equity attributable to ordinary shareholders 83,750 1,852 85,602 82,806 (2,939) 79,867 Ordinary share capital 9,375 - 9,375 9,375 - 9,375 Ordinary share premium 74,375 1,852 76,227 73,431 (2,939) 70,492 Non-controlling interest 1,376 - 1,376 1,913 (2) 1,911 Liabilities 299,415 825 300,240 469,505 3,224 472,729 Derivative liabilities - - - - 749 749 Trading liabilities - 50,116 50,116 - 63,173 63,173 Deposit and current accounts 242,618 (50,268) 192,350 360,914 (61,127) 299,787 Deposits from banks 56,152 (49,920) 6,232 68,541 (55,996) 12,545 Deposits from customers 186,466 (348) 186,118 292,373 (5,131) 287,242 Current and deferred tax liabilities 4,305 398 4,703 5,039 148 5,187 Other liabilities 52,492 579 53,071 103,552 281 103,833 Total equity and liabilities 384,541 2,677 387,218 554,224 283 554,507 1 Jan 11 31 Dec 11 Previous GAAP Nmillion Effect of transition to IFRSs Nmillion IFRSs Nmillion Previous GAAP Nmillion Effect of transition to IFRSs Nmillion IFRSs Nmillion Assets Cash and balances with central banks 10,048 - 10,048 30,072 - 30,072 Derivative assets - 263 263 - 3,081 3,081 Trading assets - 70,886 70,886 - 66,476 66,476 Pledged assets - 18,573 18,573 - 19,501 19,501 Financial investments 50,117 (29,127) 20,990 121,088 (41,971) 79,117 Loans and advances 265,144 (56,991) 208,153 331,381 (30,096) 301,285 Loans and advances to banks 87,439 (55,965) 31,474 75,796 (31,231) 44,565 Loans and advances to customers 177,705 (1,026) 176,679 255,585 1,135 256,720 Current and deferred tax assets 939 750 1,689 1,566 1,134 2,700 Other assets 13,683 3,792 17,475 25,915 (16,530) 9,385 Intangible assets 4,477 - 4,477 5,033 - 5,033 Property and equipment 26,280 (944) 25,336 25,233 (961) 24,272 Total assets 370,688 7,202 377,890 540,288 634 540,922 Equity and liabilities Equity 75,635 1,793 77,428 72,311 (2,587) 69,724 Equity attributable to ordinary shareholders 75,635 1,793 77,428 72,311 (2,587) 69,724 Ordinary share capital 9,375 - 9,375 9,375 - 9,375 Ordinary share premium 47,469 - 47,469 47,469 - 47,469 Reserves 18,791 1,793 20,584 15,467 (2,587) 12,880 Non-controlling interest - - - - - - Liabilities 295,053 5,409 300,462 467,977 3,221 471,198 Derivative liabilities - - - - 749 749 Trading liabilities - 50,116 50,116 - 63,173 63,173 Deposit and current accounts 243,747 (48,779) 194,968 364,447 (13,464) 350,983 Deposits from banks 56,152 (49,150) 7,002 68,542 (8,379) 60,163 Deposits from customers 187,595 371 187,966 295,905 (5,085) 290,820 Current and deferred tax liabilities 2,051 (1,335) 716 2,524 146 2,670 Other liabilities 49,255 5,407 54,662 101,006 (47,383) 53,623 Total equity and liabilities 370,688 7,202 377,890 540,288 634 540,922 Reconciliation of equity – Group Reconciliation of equity – Bank
  16. 16. 2928 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Holdings PLC Company Nmillion Stanbic IBTC Bank PLC Nmillion Stanbic IBTC Capital Ltd Nmillion Stanbic IBTC Pension Mgr Ltd Nmillion Stanbic IBTC Asset Mgt Ltd Nmillion Stanbic IBTC Ventures Ltd Nmillion Stanbic IBTC Trustees Ltd Nmillion Stanbic IBTC Stockbroking Ltd Nmillion Consolidations/ Eliminations Nmillion Stanbic IBTC Holdings PLC Group Nmillion Income statement Net interest income - 31,603 - 1,246 421 27 16 241 - 33,554 Non interest revenue 1,250 21,125 1,675 10,501 1,764 77 102 1,227 (3,865) 33,856 Total income 1,250 52,728 1,675 11,747 2,185 104 118 1,468 (3,865) 67,410 Staff costs (21) (17,164) (100) (1,899) (527) - (51) (191) - (19,953) Operating expenses (51) (24,717) (170) (3,299) (357) (15) (14) (213) - (28,836) Credit impairment charges - (6,895) - - - - - - - (6,895) Total expenses (72) (48,776) (270) (5,198) (884) (15) (65) (404) - (55,684) Profit before tax 1,178 3,952 1,405 6,549 1,301 89 53 1,064 (3,865) 11,726 Tax (125) 1,348 (474) (1,919) 30 (9) (7) (282) (131) (1,569) Profit for the period 1,053 5,300 931 4,630 1,331 80 46 782 (3,996) 10,157 Balance sheet Total assets 72,508 650,470 4,908 13,335 4,066 1,902 203 3,805 (74,378) 676,819 Total liabilities 1,004 586,282 477 5,474 966 169 86 2,443 (5,733) 591,168 Equity and reserves 71,504 64,188 4,431 7,861 3,100 1,733 117 1,362 (68,645) 85,651 Return on equity (%) 1.5 8.3 21.0 58.9 42.9 4.6 39.3 57.4 - 10.9 Return on assets (%) 1.5 0.8 19.0 34.7 32.7 4.2 22.7 20.6 - 1.6 Cost-to-income ratio (%) - 79.4 16.1 44.2 40.5 14.4 55.1 27.5 - 72.4 Group entity’s financial statements
  17. 17. 3130 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Stanbic IBTC Group Personal and Business Banking Banking and other financial services to individual customers and small-to-medium-sized enterprises. Corporate and Investment Banking Corporate and investment banking services to governments, parastatals, larger corporates, financial institutions and international counterparties. Wealth Investment management in form of non-pension asset management, pension asset management and trusteeship and estate management What we offer: Mortgage lending Residential accomodation loans to mainly personal market customers Instalmental sale and finance leases Finance of vehicles for personal market customers Finance of vehicles and equipment in the business market Card products Credit card facilities to individuals and businesses (Credit card issuing) Merchant transaction acquring services (card acquiring) Transactional products Comprehensive suite of transactional, savings and investment products. This includes deposit taking activities, electronic banking and debit card facilities. Lending products Lending products offered to both personal and business markets Bancassurance Short to long term insurance products to clients, through third parties, and financial planning services to clients What we offer: Global markets Fixed income and currencies Commodities Equities Investment banking Advisory Debt products Structured finance Equity capital markets Debt capital markets Structured trade and equity finance Transactional products and services Investor services Transactional banking Trade finance Real estate and principal investment management Real estate finance Investment in real estate Principal investment management Coverage and distribution Client facing sales activities within CIB division What we offer: Pension fund administration Asset management Trustee services Segmental structure for key business units Segmental structure for key business units 31 Summarised segmental income statement 33 Personal and Business Banking 34 Segmental reporting Corporate and Investment Banking 40 Wealth 46
  18. 18. 3332 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 2012 2011 Total income N23.5 billion N15.9 billion Total income increase 48% increase 35% Total income contribution (%) 34.9 28.9 Cost-to-income ratio (%) 107.1 143.2 Net interest margin (%) 7.1 7.6 Net loans and advances growth (%) 9.5 69.0 Deposit growth (%) 47.5 35.0 2012 2011 Total income N29.8 billion N29.3 billion Total income increase 2% decrease 1% Total income contribution (%) 44.3 53.0 Cost-to-income ratio (%) 57.0 49.9 Net interest margin (%) 3.4 3.8 Net loans and advances growth (%) 0.7 33.0 Deposit growth (%) 8.7 74.0 2012 2011 Total income N14.1 billion N10.2 billion Total income increase 40% increase 16% Total income contribution (%) 20.8 18.1 Cost-to-income ratio (%) 46.8 43.3 Retirement savings account growth (%) 12.3 13.0 Assets under management growth (%) 41.6 21.0 Personal and Business Banking % of group total income Corporate and Investment Banking % of group total income Wealth % of group total income Personal and Business Banking Corporate and Investment Banking Wealth Change % 2012 Nmillion 2011 Nmillion Change % 2012 Nmillion 2011 Nmillion Change % 2012 Nmillion 2011 Nmillion Gross income 65 29,257 17,734 36 48,551 35,617 40 14,052 10,026 Interest income 67 24,030 14,358 58 32,104 20,264 100 1,684 806 Interest expense 100 (5,656) (1,794) 100 (18,608) (5,992) - - - Net interest income 46 18,374 12,564 (5) 13,496 14,272 100 1,684 806 Non-interest revenue 53 5,154 3,376 9 16,334 15,009 34 12,368 9,220 Net fee and commission revenue 53 5,141 3,362 38 8,083 5,846 34 12,344 9,180 Trading revenue - - - (9) 8,091 8,845 - - - Other revenue (8) 13 14 (50) 160 318 (40) 24 40 Total income 48 23,528 15,940 2 29,830 29,281 40 14,052 10,026 Credit impairment charges 22 (3,566) (2,930) 100 (3,329) (419) - - - Total income after impairment charges 53 19,962 13,010 (8) 26,501 28,862 40 14,052 10,026 Operating expenses 10 (25,194) (22,831) 16 (17,014) (14,615) 51 (6,581) (4,346) Staff costs 9 (12,685) (11,596) 6 (4,791) (4,533) 45 (2,477) (1,711) Other operating expenses 11 (12,509) (11,235) 21 (12,223) (10,082) 56 (4,104) (2,635) Profit before taxation 47 (5,232) (9,821) (33) 9,487 14,247 32 7,471 5,680 Taxation (100) 2,222 2,391 (54) (1,896) (4,138) 10 (1,895) (1,716) Profit after taxation 59 (3,010) (7,430) (25) 7,591 10,109 41 5,576 3,964 35% 44% 21% Summarised segmental income statement
  19. 19. 3534 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Personal and Business Banking (PBB) Total income CAGR (2010-2012): 41% Net interest income and net interest revenue CAGR (2010-2012): Interest based income: 59% Non-interest based revenue: 7% Net interest income Non interest revenue Nmillion 2011 12,564 3,376 2012 18,374 5,154 2010 7,311 4,462 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Total operating income 2010 2011 2012 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 24,000 22,000 20,000 Nmillion 11,773 15,940 23,528 Net interest income Non-interest income Personal and Business Banking (PBB) segment is the retail arm of group’s business, which focuses on the commercial and small and medium scale enterprise (SME); high networth individuals (HNIs) and the personal markets segments. It provides financial solutions through products and services across various channels and platforms. With a nationwide network of branches, ATMs and bank agents, PBB is focused on providing appropriate, affordable, convenient and accessible financial solutions to customers, through passionate and customer focused employees nationwide. Products offered include vehicle and asset finance, unsecured and secured personal and business loans, bancassurance, mortgage loans, a range of trade finance products and various current, savings and investment offerings. PBB is structured along 3 business lines namely; Personal Banking, Business Banking and High NetWorth individuals (HNI). Personal Banking focuses on banking services to individuals through lifecycle management. It provides solutions that meet individual need as these needs change. Business Banking focuses on two segments - small and medium scale enterprises and commercial, providing them business solutions to support their growing business needs, while HNI focuses on offering bespoke services to high networth individuals by handling their wealth portfolio needs both locally and abroad. Financial performance Gross income grew by a significant 65% to N29.3 billion from N17.7 billion in 2011 driven by growth in interest income and non-interest revenue. Interest income increased by N9.6 billion from N14.4 billion in 2011 to N24.0 billion in 2012, thus representing a 67% growth. Interest income was supported by a growing and better priced loan book. Interest expense, however, grew considerably from N1.8 billion in 2011 to N5.7 billion in 2012 to mute the strong growth in interest income. The significant growth in interest expense is caused by the high funding cost occasioned by the high interest rate environment. Interest income was more than enough to douse the effect of growth in interest expense, thereby resulting in a 46% increase in net interest income to N18.4 billion. Net interest margin (net interest income to total assets) decreased marginally to 7.1% from 7.6% in 2011 as a result of growth in total assets and interest expense. PBB’s non-interest revenue, which comprised principally net fee and commission revenue, benefitted from increased transaction volumes and activities on the back of our enlarged points of representation. Thus, non-interest revenue grew strongly by 53% to N5.1 billion. PBB’s revenues in 2012 witnessed significant growth as in prior year. Total income grew by N7.6 billion in 2012 to close at N23.5 billion. This represents an increase of 48% when compared to 2011 results. The growth in total income was tempered by growth in credit impairment charges and operating expenses. Credit impairment charges increased by 22% to N3.6 billion as a result of the business segment’s conservative stance to provisioning in the light of the prevailing high interest rate operating condition. Operating expenses grew by 10% on the back of growth in staff cost and other operating expenses. PBB’s operating expenses has been growing at a reduced rate when compared to the growth rate in the previous years. This is as a result of slowdown in investment on branch expansion and operating platform. We believe with the existing number of branches, the business segment can compete favourably in the retail market. The effect of increased operating costs and impairment charges resulted in the unit recording a loss before tax of N5.2 billion and loss after tax of N3 billion. This is an improvement over N9.8 billion loss before tax and N7.4 billion loss after tax recorded in 2011. Cost-to-income ratio, although still high, improved from 143% in 2011 to 107%. The business segment continued to grow its loan book responsibly despite the testing operating environment. Gross loans and advances grew by 17% to stand at N105.1 billion at the end of 2012. The loan book benefitted from growing customer relationships, a function of our enlarged branch network. Asset quality deteriorated during the year 2012 as evidenced by over 100% growth in non-performing loans to N8.7 billion (2011: N3.0 billion). The deterioration in asset quality is as a result of strain on customers repayment ability due to the high interest rate environment. Instalmental sale and finance lease and term loans accounted for 80% of the business unit’s non-performing loan book. The considerable growth in non-performing loans adversely affected the ratio of non-performing loans to total loans which increased to 8.2% from 3.2% recorded in 2011. This is slightly above our 7% internal guidance for retail business. Deposit liabilities also benefitted from enlarged branch network and customer base as it recorded a 48% growth to N164.0 billion. Low cost savings and current deposits accounted for 57% of the unit’s deposit base in 2012, which was lower than the 64% recorded in 2011. The business unit received a mobile payment license from the central bank in the last quarter of 2011 and it became the first deposit money bank in Nigeria to partner with all four mobile telephone operators. The unit had over 700,000 clients on its mobile money platform at the end of 2012. This has improved the reach to the un-/under-banked in support of the CBN’s financial inclusion goal. The business unit was ranked third in retail and SME business segments by KPMG Professionals in the 2012 Customer Satisfaction survey. Performance highlights Change % 2012 2011 Net interest income Nmillion 46 18,374 12,564 Non-interest revenue Nmillion 53 5,154 3,376 Credit impairment charges Nmillion 22 (3,566) (2,930) Operating expenses Nmillion 10 (25,194) (22,831) Profit before tax Nmillion 47 (5,232) (9,821) Profit after tax Nmillion 59 (3,010) (7,430) Total assets Nmillion 56 257,191 165,186 Gross loans and advances Nmillion 13 105,055 93,067 Deposit liabilities Nmillion 48 164,031 111,207 Cost-to-income ratio % 107.1 143.2 Net interest margin % 7.1 7.6 Non-interest income to total income % 21.9 21.2 Credit loss ratio % 3.4 3.1 Loan to deposit % 64.0 80.6 Non-performing loans to total loans and advances % 8.2 3.2 Other key business statistics Business infrastructure Branch network Number 4 177 171 ATMs Number 35 249 185
  20. 20. 3736 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Quarterly performance highlights 4Q 2012 3Q 2012 2Q 2012 1Q 2012 Net interest income Nmillion 5,099 5,048 4,200 4,027 Non-interest revenue Nmillion 1,367 1,322 1,385 1,080 Credit impairment charges Nmillion (1,215) (1,009) (1,160) (182) Operating expenses Nmillion (6,365) (6,597) (6,621) (5,611) Total assets Nmillion 257,191 178,279 163,196 175,206 Gross loans and advances Nmillion 105,055 103,080 104,776 98,660 Deposit liabilities Nmillion 164,031 148,141 120,655 116,343 Cost-to-income ratio % 98.4 103.6 118.5 109.9 Non-interest income to total income % 21.1 20.8 24.8 21.1 Credit loss ratio % 1.2 1.0 1.1 0.2 Loan to deposit % 64.0 69.6 86.8 84.8 Non-performing loans to total loans % 8.2 6.4 5.4 4.6 Other key business statistics Business infrastructure Branch network Number 177 175 174 173 ATMs Number 249 216 201 193 Business unit performance Personal banking Business banking HNIs Total Net interest income Nmillion 4,925 11,376 2,073 18,374 Non-interest revenue Nmillion 2,193 2,433 528 5,154 Credit impairment charges Nmillion (845) (2,711) (9) (3,566) Operating expenses Nmillion (12,687) (11,178) (1,329) (25,194) Profit/(loss) before tax Nmillion (6,414) (80) 1,262 (5,232) Profit/(loss) after tax Nmillion (4,879) 430 1,439 (3,010) Total assets Nmillion 90,017 146,599 20,575 257,191 Gross loans and advances Nmillion 36,769 59,881 8,404 105,055 Deposit liabilities Nmillion 52,490 83,656 27,885 164,031 Cost-to-income ratio % 178.2 80.9 51.1 107.1 Net interest margin % 5.5 7.8 10.1 7.1 Non interest income to total income % 30.8 17.6 20.3 21.9 Credit loss ratio % 2.3 4.5 0.1 3.4 Loan to deposit % 70.1 71.6 30.1 64.0 Investment banking Transactional products and services Global markets 11% 59% 30% Investment banking Transactional products and services Global markets 11% 53% 36% 2012 2011 Personal banking Business banking HNIs Personal banking Business banking HNIs Total income by business unit Factors impacting the results Favourable Strong revenue growth in business banking Interest income benefitted from growing loan book at higher pricing. Higher non-interest revenue following strong growth in the transactional volumes as well as increased electronic and card based commission revenue. Strong growth in customer deposits, driven by both an increase in number of customers and higher average balances per deposit account. Growing loan book despite the testing operating environment. Adverse Increased credit impairment charges due to high interest rate environments with adverse effect on profitability. Growth in interest expense as a result of increased contribution of term funding in deposit mix and the monetary policy tightening of the CBN. Personal and Business Banking continued
  21. 21. 3938 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Breakdown of loans and advances to customers Change % 2012 Nmillion 2011 Nmillion Gross loans and advances 13 105,055 93,067 Mortgage lending (22) 10,571 13,582 Instalmental sale and finance leases 18 17,080 14,443 Overdrafts 5 13,531 12,827 Term loans 22 63,873 52,215 Provisions 89 (7,544) (3,985) Specific credit impairments 100 (5,561) (2,527) Portfolio credit impairments (18) (1,983) (1,458) Net loans and advances 9 97,511 89,082 Breakdown of non-performing loans Overdrafts 100 647 30 Term loans 100 5,839 1,768 Instalmental sale and finance leases 92 1,128 587 Home loans 70 1,052 619 Total non-performing loans 100 8,666 3,004 Loans and advances Mortgage lending Reduction in loan book as a result of the high interest rate environment, which affected customer patronage. Deterioration in the product asset book as non-performing mortgage loans to total mortgage loans worsened to 10.0% (2011: 4.6%). Instalmental sale and finance leases Continued market leadership in vehicle and asset finance business in Nigeria as evidenced by ”Bank of the Year” award received during the Nigerian Auto Award 2012. Continued improvement in vehicle sales especially in the personal segment, which positively impacted interest income. Margin compression due to competitive pressure and increased cost of funding. Deterioration in asset quality as non-performing VAF loans increased to 6.6% (2011: 1.8%) of total Instalmental sale and finance leases loans. Transactional and lending products Increased balances in overdrafts and revolving credit facilities primarily due to continued focus on group schemes. Increased business term loans especially in the SME business segment driven by higher utilization of working capital facilities. Growth in personal transactional volumes and improved business volumes. Good margin on term advances as a result of better pricing of risk. Increased non-interest revenue driven by growth in the transactional account base. Deterioration in asset quality as non-performing loans increased to 8.4% (2011: 2.8%) of total loans. Growth in number of ATM and PoS contributed to higher transaction volumes and revenue. Higher credit impairment charges largely due to growth in the unsecured lending book and work place banking. Deposits breakdown Change % 2012 Nmillion 2011 Nmillion Current deposits 29 76,793 59,322 Savings deposits 23 15,116 12,315 Call deposits 57 1,799 1,146 Term deposits 83 70,323 38,424 Total deposit liabilities 48 164,031 111,207 Deposit liabilities Higher current and savings deposits driven by growth in number of accounts. Stable and lower priced deposits accounted for 57% of total deposits, although lower than the 64% recorded in 2011. Continued focus on service excellence and internal efficiencies to attract and retain potential and existing customers. Continued to leverage on the investment in operating platform to increase deposit base. Aggressive pursuit of mobile money offerings for liabilities and customers. Personal and Business Banking continued
  22. 22. 4140 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Corporate and Investment Banking is the wholesale banking arm of the group through which investment, transactional and financing solutions are provided to large local and multinational corporates, institutional and public sector clients in strategic sectors of the economy.The services offered include debt and equity advisory, structured and project finance, trade services, transactional banking and lending, global markets, custody and stockbroking amongst others. The unit is divided into three distinct business sub-units namely; Investment banking, Global markets, and Transactional products and services. Investment Banking delivers financial advisory, tailored structuring and funding solutions, which include debt and equity capital offerings. The Global Markets team comprises traders, sales managers and analysts of varying specialisation in equities, fixed income, foreign exchange, money market and other hedging requirements. Transactional product and services offers standardised or tailored transactional products and services including cash management, trade finance and custody solutions. A corporate banking team manages the corporate relationships and is the main point of contact with our clients. Financial performance CIB’s gross income was up 36% driven by 58% and 9% growth in interest income and non-interest revenue respectively. The significant growth in interest income was occasioned by improved yield in investment securities and the loan book. However, the growth in interest income was dwarfed by a considerable growth in interest expense on the back of high funding cost and a challenging interest rate movement, resulting in margin compression. Interest expense grew from N6.0 billion in 2011 to N18.6 billion. Consequently, net interest income was adversely impacted and recorded a 5% reduction to N13.5 billion. Net interest margin (net interest income to total assets), which measures the quality of spread, was down to 3.4% from 3.8% in 2011. The major challenge facing the business unit is high cost of funding as the deposit base is still skewed towards expensive term funding, a function of the characteristics of the legacy institutions (Stanbic Nigeria Limited and IBTC Chartered Bank), which were primarily merchant and investment banking businesses, from which CIB evolved. Non-interest revenue grew by 9% to N16.3 billion, due to a 38% growth in net fee and commission revenue. Net fee and commission at N8.1 billion benefitted from increased transactional volumes in the transactional product and services unit, closure of good advisory mandates in the investment banking unit and the rebound in the capital markets in the second half of the year, which positively affected the revenue of our custody and stockbroking businesses. Non- interest revenue was however, adversely impacted by a reduction in trading revenue and other non-interest revenue. Trading revenue was down 9% occasioned by a 1% and 55% decline in foreign exchange income and credit trading income respectively. The decrease in foreign exchange trading revenue is attributable to the relative stability in the foreign exchange market in 2012 compared to the volatile market of 2011. Overall, total income grew marginally by 2% to close at N29.8 billion but was impacted by growth in credit impairment charges and operating expenses. Credit impairments increased significantly to N3.3 billion from N0.4 billion as a result of higher specific impairment charges involving 3 obligors. Operating expenses grew by 16% on the back of 6% growth in staff costs and 21% growth in other operating expenses.The increase in other operating expenses is attributable to AMCON sinking fund contribution and one– off HoldCo restructuring cost. Cost-to-income ratio was up from 49.9% in 2011 to 57.0%. The effect of the increased credit impairments and operating expenses adversely affected profit before tax which was down by 33% to N9.5 billion, while profit after tax declined by 25% to N7.6 billion. CIB’s loan book witnessed a 1% increase to close at N174.4 billion. The marginal increase in the business segment’s loan portfolio is as a result of sell down of large existing performing loans in the third quarter of the year in order to comply with the statutory single obligor limit requirement post HoldCo restructuring. A total of N6.0 billion loans were sold in this regard. None of these loans were sold at a loss. In addition, two delinquent loans, amounting to N12.3 billion were sold to AMCON in the last quarter of the year. N8.9 billion was received for the sale. Adjusting for the sales of the existing large performing exposure and the NPLs, the business unit’s loan book would have grown by 11%. Competition for good quality credits from corporate clients remained stiff during the year. CIB’s non-performing loans declined by 58% to N5.7 billion. Consequently, the ratio of non-performing loans to total loans, declined to 3.3% from 7.8% in 2011. Deposits from customers rose 9% to N191.4 billion from N176.0 billion in 2011. There was a conscious effort during the year to exit expensive term funding and source lower priced deposits and as expected, the deposit mix improved as the ratio of demand deposits improved to 32% from 24% recorded in 2011. The unit plans to increase the contribution of demand deposits to total deposits to 45% in 2013 as it focuses on transactional banking and public sector funds. The business unit was ranked 8th in the 2012 KPMG Customer Survey exercise. This was an improvement over the 17th position it ranked in 2011. Some of the awards won in 2012 include: Broker Dealing Firm 2012, The Nigerian Stock Exchange. Best Broker in Nigeria, EMEA Finance, 2012. Best Investment Bank in Nigeria, EMEA Finance Banking Award, 2012. Best Bank in Africa, Euromoney Real Estate Award, 2012. Best Custodian in Nigeria 2012 by Global Investor for the sixth year running. Corporate and Investment Banking (CIB) Total income Net interest income and non-interest revenue Total operating income 2010 2011 2012 0 5,000 10,000 15,000 20,000 25,000 35,000 30,000 Nmillion 29,597 29,281 29,830 Net interest incomeNet interest income Non interest revenue Nmillion 2011 14,272 15,009 2012 13,496 16,334 2010 12,566 17,031 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Non-interest revenue Performance highlights Change % 2012 2011 Net interest income Nmillion (5) 13,496 14,272 Non-interest revenue Nmillion 9 16,334 15,009 Credit impairment charges Nmillion 100 (3,329) (419) Operating expenses Nmillion 16 (17,014) (14,615) Profit before tax Nmillion (33) 9,487 14,247 Profit after tax Nmillion (25) 7,591 10,109 Total assets Nmillion 7 402,597 376,499 Gross loans and advances Nmillion 1 174,418 173,015 Deposit liabilities Nmillion 9 191,388 176,035 Cost-to-income ratio % 57.0 49.9 Net interest margin % 3.4 3.8 Non-interest revenue to total income % 54.8 51.3 Credit loss ratio % 1.9 0.2 Loans to deposits % 91.1 100.3 NPL/total loan ratio % 3.3 8.6 Other key business statistics Investor services Transaction volumes Number 100 5,972 2,546 Holdings under custody Nmillion 100 2,113,885 598,275
  23. 23. 4342 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Quarterly performance highlights 4Q 2012 3Q 2012 2Q 2012 1Q 2012 Net interest income Nmillion 1,343 3,875 4,417 3,861 Non-interest revenue Nmillion 7,529 3,032 2,866 2,907 Credit impairment charges Nmillion (2,605) (776) 979 (927) Operating expenses Nmillion (3,829) (4,786) (4,424) (3,975) Profit before tax Nmillion 2,438 1,345 3,838 1,866 Total assets Nmillion 402,597 438,948 399,614 326,795 Gross loans and advances Nmillion 174,418 170,829 178,696 178,349 Deposit liabilities Nmillion 191,388 157,132 125,544 154,242 Cost-to-income ratio % 43.2 69.3 60.7 58.7 Net interest margin % 1.3 3.5 4.4 4.7 Non-interest revenue to total income % 84.9 43.9 39.4 43.0 Credit loss ratio % 1.5 0.5 (0.5) 0.5 Loans to deposits % 91.1 108.7 142.3 115.6 NPL/total loan ratio % 3.3 11.6 10.0 7.8 Business unit performance highlights Global markets Investment banking Transactional products and services Total Total income Nmillion 7,057 9,756 13,017 29,830 Credit impairment charges Nmillion - (2,259) (1,070) (3,329) Operating expenses Nmillion (4,991) (4,240) (7,783) (17,014) Profit before tax Nmillion 2,066 3,257 4,164 9,487 Gross loans and advances Nmillion - 113,371 61,046 174,418 Deposit liabilities Nmillion - - 191,388 191,388 Cost-to-income ratio % 70.7 43.5 59.8 57.0 Credit loss ratio % - 2.0 1.8 1.9 Investment banking Transactional products and services Global markets 37% 30% 33% 20112012 Investment banking Transactional products and services Global markets 24% 43% 33% Investment banking Transactional products and services Global markets Investment banking Transactional products and services Global markets Favourable Strong revenue growth in Transactional products and services business unit. High trade and transactional volumes with positive impact on net fee and commission revenue. Strong growth in assets under custody, with positive effect on non-interest income. Closure of more advisory mandates in investment banking. Improved yield on investment securities with positive impact on interest income. Bullish trend in capital market in the second half of the year, which affected the revenues of our custody and stock broking businesses positively. Strong performance in interest rate and foreign exchange trading. Growing deposit balances. Resolution of top NPLs improved asset quality. Adverse Margin compression as cost of funding increased with limited ability to pass on increase due to competitive pressure. Large specific credit impairments, with negative impact on profitability. Growth in operating expenses. Challenging market conditions for trading. Deposit base skewed towards expensive term deposits, with the resultant negative effect on net interest income. Bearish trend in the capital market in the first half of the year. Total income by business segment Factors impacting the results Corporate and Investment Banking (CIB) continued
  24. 24. 4544 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Global markets Increased interest income occasioned by improved yield in investment securities. Higher income from interest rate trading, with positive impact on trading revenue. Revenue positively impacted by higher transaction volumes. Improved performance of the capital market increased revenue of stock broking business. Reduced revenue occasioned by the challenging operating environment on the back of tight margins, subdued trading volumes and increased competition. Investment banking Good growth in fee and commission revenue on the back of closure of more advisory mandates. Reduction in interest income as a result of sale of existing large performing exposures in order to comply with the single obligor limit of post corporate restructuring. Large credit impairment charges on portfolio, with negative impact on revenue. Transactional products and services Increased trade and investor services volumes, with positive impact on revenue. Strong revenue growth due to average loan book growth and growth in transaction volumes. Small number of large credit impairment provisions following strong loan book. Strong deposits and assets growth. Improvement in asset quality. Reduction in net interest income due to negative endowment effect. Breakdown of non-performing loans Change % 2012 Nmillion 2011 Nmillion Overdrafts (72) 141 509 Term loans (63) 4,514 12,206 Instalmental sales and finance leases 22 1,019 835 Total non-performing loans (58) 5,674 13,550 Breakdown of loans and advances to customers Change % 2012 Nmillion 2011 Nmillion Gross loans and advances 1 174,418 173,015 Instalmental sales and finance leases 13 12,598 11,171 Overdrafts 3 16,085 15,668 Term loans (0) 145,735 146,176 Credit impairments 4 (5,585) (5,377) Specific credit impairments 7 (3,726) (3,497) Portfolio credit impairments (1) (1,859) (1,880) Net loans and advances 1 168,833 167,638 Continued competition for good quality credits. The growth in overdrafts and instalmental sales and finance leases were offset by the reduction in term loans. Significant reduction in non-performing loans driven by sales of eligible risk assets to AMCON. Growth in instalmental sale and finance leases non-performing loans due to the high interest rate environment. Deposits liabilities Change % 2012 Nmillion 2011 Nmillion Current and demand deposits 48 61,731 41,847 Call deposits (26) 20,377 27,401 Term deposits 2 109,280 106,787 Total deposit liabilities 9 191,388 176,035 Growth in deposit liabilities, although still skewed towards expensive term funding. Conscious effort to rebalance the deposit book to improve deposit mix and margin. Continued high interest rate environment impacted funding cost negatively. Continue to focus on gathering lower priced deposits. Loans and advances Corporate and Investment Banking (CIB) continued
  25. 25. 4746 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Wealth Wealth group focuses primarily on pension administration, private non-pension asset management, as well as trusteeship and estate planning business. The pension administration is managed through Stanbic IBTC Pension Managers Limited, while the non-pension asset management is managed by Stanbic IBTC Asset Management Limited and trusteeship and estate management is managed by Stanbic IBTC Trustees Limited. The wealth business model is primarily focused on assisting clients in investing in a variety of asset classes, including fixed income and equities markets to accumulate and preserve wealth. Financial performance The wealth group’s gross income grew by 40% to N14.1 billion, driven by increased income from investment in money market and fee and commission revenue. Interest income grew considerably from N0.8 billion in 2011 to N1.7 billion. The growth in interest income was supported by the positive yield in money market investment. Non-interest revenue, comprising of fees and commissions and other income, was up 34% to N12.4 billion on the back of continued growth Total operating income CAGR (2010 – 2012): 27% Profit after tax CAGR (2010 – 2012): 39% ng income 2010 2011 2012 0 4,000 2,000 6,000 8,000 10,000 12,000 16,000 14,000 Nmillion 8,676 10,026 14,052 Total operating income 2010 2011 2012 0 1,000 2,000 3,000 4,000 6,000 5,000 Nmillion 2,899 3,896 5,576 in pension clients and related funds under management. Assets under management grew by 42% to stand at N990.9 billion, from N699.8 billion achieved 2011, while the number of Retirement Savings Accounts (RSA) increased by 12% to 1,054,525, crossing the 1,000,000 mark. The lull in the capital market in the first half of the year, affected the revenues of the asset management business, this was however reversed in the second half of the year, when the capital market bounced into positive performance. Total income increased by 40% to N14.1 billion. The growth in total income helped to soften the impact of a 51% rise in operating expenses. The considerable growth in operating expenses is driven by 56% and 45% growth in other operating expenses and staff costs respectively. The increase in other operating expenses was due to the regulatory induced investment in technology to capture clients’ biometric information, while staff costs growth was due to recruitment of non-full time staff to help with the clients’ data capturing. Consequently, the growth in operating expenses resulted in increase in cost-to-income ratio to 46.8% from 43.3% in 2011. Overall, profit before tax was up by 32% to close at N7.5 billion, while profit after tax grew by 41% to N5.6 billion. Change % 2012 Nmillion 2011 Nmillion Interest income Nmillion 100 1,684 806 Non-interest income Nmillion 34 12,368 9,220 Operating expenses Nmillion 51 (6,581) (4,346) Profit before tax Nmillion 32 7,471 5,680 Profit after tax Nmillion 41 5,576 3,964 Total assets Nmillion 33 17,031 12,822 Assets under management Nmillion 42 990,881 699,961 Retirement savings accounts Number 12 1,054,525 939,173 Cost-to-income ratio % 46.8 43.3 Return on equity % 52.6 43.6 Performance highlights Quarterly performance highlights 4Q 2012 3Q 2012 2Q 2012 1Q 2012 Net interest income Nmillion 511 448 355 370 Non-interest income Nmillion 3,642 3,146 3,136 2,444 Operating expenses Nmillion (2,146) (1,426) (1,566) (1,443) Profit before tax Nmillion 2,007 2,168 1,925 1,371 Total assets Nmillion 17,031 16,957 14,631 11,149 Assets under management Nmillion 990,881 911,780 832,690 746,270 Retirement savings accounts Nmillion 1,054,525 1,020,893 994,903 966,421 Cost-to-income ratio % 51.7 39.7 44.9 51.3 Business unit performance highlights Pension management Asset management Trusteeship Total Total income Nmillion 11,744 2,188 120 14,052 Operating expenses Nmillion (5,442) (1,069) (70) (6,581) Profit before tax Nmillion 6,302 1,119 50 7,471 Profit after tax Nmillion 4,384 1,150 42 5,576 Total assets Nmillion 12,886 3,942 203 17,031 Assets under management Nmillion 865,861 125,020 0 990,881 Cost-to-income ratio % 46.3 48.9 58.3 46.8
  26. 26. 4948 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Group results in brief Market and shareholder information Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Investment banking Transactional products and services Global markets 1% 84% 15% Investment banking Transactional products and services Global markets 81% 19% 2012 2011 Asset management Pension management Trusteeship Asset management Pension management Assets under management (AuM) and retirement savings account CAGR (2010-2012): Pension management AuM: 33% Asset management AuM: 17% Retirement savings accounts: 12% Nmillion No. (000) 2011 93.6 606.2 2012 125.0 865.9 2010 91.4 488.8 0 100 200 300 400 500 600 700 800 900 1,000 0 200 400 600 800 1000 1,200 Asset management Retirement savings accountPension management Total income by business segment Some of the key achievements by the group include: Largest and number one wealth manager in Nigeria in term of assets under management and number of clients. Awarded the Pension Fund Administrator (PFA) of the year by the Leadership Newspaper Group Limited. Pension fund management Asset under management grew by 43% to N865.9 billion, making it the largest pension manager in Nigeria. Continued market leadership with over 20% of market share. Retirement savings account crossing one million mark and up 12% year-on-year. Deployed the inclusion of RSA services on the Stanbic IBTC Bank ATMs, where pension clients can check their RSA balances. Maintained cost efficiency by attaining a cost-to-income ratio of 47% despite huge investment in biometric and other IT-related projects. Awarded the Pension Fund Administrator (PFA) of the year by the Leadership Newspaper Group Limited. Continued to maintain strong return on equity in excess of 40%. Asset management Grew asset under management by 33% to N125.02 billion, crossing the N100 billion mark. Continued market leadership as the largest independent non-pension assets manager measured by value of assets under management, number and size of mutual funds and number of clients. Pioneered the launch of an umbrella fund (with three sub-funds). Commenced the mark-to-market valuation of the bond portfolio of our fixed income mutual funds in line with the global best practice. Maintained a subscriber base of about 35,000 in mutual funds despite investors’ apathy and other macro-economic challenges. Trustee and estate management Broke even in the first quarter of 2012 and closed the year with a profit before tax of N50million in the first full year of operation Acquired additional 15 clients in the course of the year in the corporate trusteeship arm of the business, bringing the total number of clients to 16. Retail wills closed the year with 1,500 clients. Wealth continued Favourable Continued growth in pension clients and related funds under management. Improved yield in investment securities, with positive impact on interest income Improved performance of the stock market especially in the last 2 quarters of the year. Adverse Increase in operating costs driven by regulatory induced investment in technology. Factors impacting the results
  27. 27. 51 Group results in brief Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Income statement analysis Market and shareholder information 50 Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Drivers of group income Gross income CAGR (2010-2012): 30% Interest based revenue and non-interest revenue CAGR (2010-2012): Interest based revenue: 54% Non-interest based revenue: 7% 0 10,000 20,000 30,000 40,000 50,000 60,000 Nmillion Interest income Interest expense Operating expenses Profit before taxation Profit after taxation TaxesNon-interest revenue Credit impairment charges 57,818 24,264 33,856 6,895 48,789 11,726 1,569 10,157 Total operating income 2010 2011 2012 0 20,000 10,000 30,000 40,000 50,000 60,000 100,000 70,000 80,000 90,000 Nmillion 54,296 63,377 91,860 0 60,000 Nmillion 50,000 40,000 30,000 10,000 20,000 0 60 50 70 % 40 30 20 10 2010 2011 2012 24,342 29,954 35,428 27,949 57,818 34,042 Overview of group income Interest based revenue Non-interest based revenue Interest based revenue/ gross revenue Overview of group income 51 Net interest income and margin analysis 53 Non-interest revenue 55 Income statement analysis Credit impairment charges 57 Operating expenses 59 Taxation 62
  28. 28. 5352 Group results in brief Income statement analysis Capital management Segmental reporting Other information Balance sheet analysis Income statement analysis Market and shareholder information Stanbic IBTC Analysis of financial results for the year ended 31 December 2012 Income statement summary Change % 2012 Nmillion 2011 Nmillion Net interest income 21 33,554 27,642 Non-interest revenue 23 33,856 27,605 Credit impairment charges 100 (6,895) (3,349) Operating expenses 17 (48,789) (41,792) Profit before tax 16 11,726 10,106 Profit after tax 53 10,157 6,643 Total income and profitability Total income: (CAGR: 2010-2012) 16% Income growth Vs Cost growth Net interest income Non interest revenue Nmillion % 2011 55,247 6,643 2012 67,410 10,157 2010 50,041 10,333 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 0 5.0 10.0 15.0 20.0 25.0 Net interest income Non interest revenue % 2011 20122010 14 0 5 10 15 20 25 20 16 21 22 17 Total income Total income growthProfit after tax Profit after tax / total income Total cost growth Investment banking Transactional products and services Global markets 21% 35% 44% Investment banking Transactional products and services Global markets 18% 29% 53% 2012 2011 Corporate and investment banking Corporate and investment banking Personal and business banking Personal and business banking Wealth Wealth Total income by business unit Net interest income and net interest margin Net interest income: CAGR (2010-2012): 28% Composition of interest income 0 30,000 25,000 20,000 5,000 15,000 10,000 40,000 35,000 Nmillion % Net interest income Net interest margin before impairment charges on total Net interest margin before impairment charges on total 0 5.0 1.0 2.0 4.0 3.0 6.0 2011 2012 33,55427,64220,447 2010 5.28% 4.98% 4.96% 5.23% 4.38% 3.94% 2010 2011 2012 0 80% 60% 40% 20% 100% 59% 30% 11% 83% 15% 2% 76% 23% 1% Net interest income and margin analysis Investment securitiesNet interest income Placements Loans and advances Net interest margin before impairment charges on total assets Net interest margin after impairment charges on total assets Change % 2012 Nmillion 2011 Nmillion Interest income on investment securities 100 13,271 5,340 Interest income on placement with banks (50) 352 706 Interest revenue on loans and advances 50 44,195 29,382 Medium term advances 52 30,988 20,414 Overdrafts 59 5,686 3,578 Home loans (11) 2,108 2,381 Instalmental sales and finance leases 80 5,413 3,009 Interest income 63 57,818 35,428 Interest expense 100 24,264 7,786 Savings accounts 16 200 172 Current accounts (11) 513 575 Time deposit 100 21,452 4,176 Inter-bank takings (11) 1,234 1,391 Borrowed funds (41) 865 1,472 Net interest income 21 33,554 27,642 Breakdown of net interest income

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